XML 82 R14.htm IDEA: XBRL DOCUMENT
v3.20.1

Investments in Other Entities | 12 Months Ended
--- | ---
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Other Entities | Investments in Other Entities Equity Method Investments in other entities – equity method consisted of the following:
|  | December 31, 2019 |  | December 31, 2018
Universal Care, Inc. |  | $ | 1,438,199 |  |  | $ | 2,635,945 |
LaSalle Medical Associates – IPA Line of Business |  | 6,396,706 |  |  | 7,054,888 |
Diagnostic Medical Group |  | 2,334,083 |  |  | 2,257,346 |
Pacific Medical Imaging & Oncology Center, Inc. |  | 1,395,878 |  |  | 1,359,494 |
Pacific Ambulatory Surgery Center, LLC |  | — |  |  | 285,198 |
Accountable Health Care IPA |  | — |  |  | 4,977,957 |
531 W. College, LLC |  | 16,697,898 |  |  | 16,273,152 |
MWN, LLC |  | 164,691 |  |  | 33,000 |
|  | $ | 28,427,455 |  |  | $ | 34,876,980 |
LaSalle Medical Associates - IPA Line of Business LMA was founded by Dr. Albert Arteaga in 1996 and currently operates six neighborhood medical centers through its network of more than 2,300 PCP and Specialists providers, treating children, adults and seniors in San Bernardino County. LMA’s patients are primarily served by Medi-Cal and they also accept Blue Cross, Blue Shield, Molina, Care 1 st, Health Net and Inland Empire Health Plan. LMA is also an IPA of independently contracted doctors, hospitals and clinics, delivering high quality care to more than 310,000 patients in Fresno, Kings, Los Angeles, Madera, Riverside, San Bernardino and Tulare Counties. During 2012, APC-LSMA and LMA entered into a share purchase agreement whereby APC-LSMA invested $5.0 million for a 25% interest in LMA’s IPA line of business. NMM has a management services agreement with LMA. APC accounts for its investment in LMA under the equity method as APC has the ability to exercise significant influence, but not control over LMA’s operations. For the year ended December 31, 2019, APC recorded a net loss of $2.8 million from its investment in LMA as compared to net loss of $2.4 million for the year ended December 31, 2018, in the accompanying consolidated statements of income. During the year ended December 31, 2019, the Company contributed $2.1 million to LMA as part of its 25% interest. The investment balance was $6.4 million and $7.1 million at December 31, 2019 and 2018, respectively. LMA’s IPA line of business unaudited summarized balance sheets at December 31, 2019 and 2018 and unaudited summarized statements of operations for the years ended December 31, 2019 and 2018 are as follows: Balance Sheets
|  | December 31, 2019 (unaudited) |  | December 31, 2018 (unaudited)
Assets |  |  |  |
Cash and cash equivalents |  | $ | 6,345,195 |  |  | $ | 18,444,702 |
Receivables, net |  | 5,123,228 |  |  | 2,897,337 |
Other current assets |  | 3,526,319 |  |  | 5,459,442 |
Loan receivable |  | 2,250,000 |  |  | 1,250,000 |
Restricted cash |  | 683,358 |  |  | 667,414 |
Total assets |  | 17,928,100 |  |  | 28,718,895 |
Liabilities and Stockholders’ (Deficit) Equity |  |  |  |
Current liabilities |  | $ | 23,529,745 |  |  | $ | 26,837,814 |
Stockholders’ (deficit) equity |  | (5,601,645 | ) |  | 1,881,081 |
Total liabilities and stockholders’ (deficit) equity |  | $ | 17,928,100 |  |  | $ | 28,718,895 |
Statements of Operations
|  | Year Ended December 31, 2019 (unaudited) |  | Year Ended December 31, 2018 (unaudited)
Revenues |  | $ | 194,020,435 |  |  | $ | 239,031,485 |
Expenses |  | 205,153,162 |  |  | 251,738,193 |
Loss from operations |  | (11,132,727 | ) |  | (12,706,708 | )
Other Income |  | — |  |  | 173,356 |
Loss before income tax benefit |  | (11,132,727 | ) |  | (12,533,352 | )
Income tax benefit |  | — |  |  | (3,334,332 | )
Net loss |  | $ | (11,132,727 | ) |  | $ | (9,199,020 | )
Pacific Medical Imaging and Oncology Center, Inc. PMIOC was incorporated in 2004 in the state of California. PMIOC provides comprehensive diagnostic imaging services using state-of-the-art technology. PMIOC offers high quality diagnostic services such as MRI/MRA, PET/CT, CT, nuclear medicine, ultrasound, digital x-rays, bone densitometry and digital mammography at their facilities. In July 2015, APC-LSMA and PMIOC entered into a share purchase agreement whereby APC-LSMA invested $1.2 million for a 40% ownership in PMIOC. APC and PMIOC have an Ancillary Service Contract together whereby PMIOC provides covered services on behalf of APC to enrollees of the plans of APC. Under the Ancillary Service Contract APC paid PMIOC fees of $2.7 million and $2.5 million for the years ended December 31, 2019 and 2018, respectively. APC accounts for its investment in PMIOC under the equity method of accounting as APC has the ability to exercise significant influence, but not control over PMIOC’s operations. During the year ended December 31, 2019, APC recorded net income of $36,384 from its investment as compared to net loss of $41,199 for the year ended December 31, 2018 in the accompanying consolidated statements of income and has an investment balance of $1.4 million at December 31, 2019 and 2018, respectively. Universal Care, Inc. UCI is a privately held health plan that has been in operation since 1985 in order to help its members through the complexities of the healthcare system. UCI holds a license under the California Knox-Keene Health Care Services Plan Act (Knox-Keene Act) to operate as a full-service health plan. UCI contracts with the CMS under the Medicare Advantage Prescription Drug Program. On August 10, 2015, UCAP, an entity solely owned 100% by APC with APC’s executives, Dr. Thomas Lam, Dr. Pen Lee and Dr. Kenneth Sim, as designated managers, purchased from UCI 100,000 shares of UCI class A-2 voting common stock (comprising 48.9% of the total outstanding UCI shares, but 50% of UCI’s voting common stock) for $10 million. APC accounts for its investment in UCI under the equity method of accounting as APC has the ability to exercise significant influence, but not control over UCI’s operations. During the years ended December 31, 2019 and 2018, APC recorded losses from this investment of $1.2 million and $6.0 million, respectively, in the accompanying consolidated statements of income and has an investment balance of $1.4 million and $2.6 million at December 31, 2019 and 2018, respectively. UCI’s unaudited balance sheets at December 31, 2019 and 2018 and unaudited statements of operations for the years ended December 31, 2019 and 2018 are as follows: Balance Sheets
|  | December 31, 2019 (unaudited) |  | December 31, 2018 (unaudited)
Assets |  |  |  |
Cash |  | $ | 33,889,962 |  |  | $ | 27,812,520 |
Receivables, net |  | 63,843,009 |  |  | 46,978,703 |
Other current assets |  | 38,280,156 |  |  | 18,670,350 |
Other assets |  | 882,243 |  |  | 661,621 |
Property and equipment, net |  | 4,021,341 |  |  | 2,786,996 |
Total assets |  | $ | 140,916,711 |  |  | $ | 96,910,190 |
Liabilities and stockholders’ deficit |  |  |  |
Current liabilities |  | $ | 128,330,389 |  |  | $ | 89,731,133 |
Other liabilities |  | 33,132,948 |  |  | 25,024,043 |
Stockholders’ deficit |  | (20,546,626 | ) |  | (17,844,986 | )
Total liabilities and stockholders’ deficit |  | $ | 140,916,711 |  |  | $ | 96,910,190 |
Statements of Operations
|  | Year Ended December 31, 2019 (unaudited) |  | Year Ended December 31, 2018 (unaudited)
Revenues |  | $ | 500,374,910 |  |  | $ | 326,719,634 |
Expenses |  | 502,566,659 |  |  | 335,242,582 |
Loss before income tax provision |  | (2,191,749 | ) |  | (8,522,948 | )
Income tax provision |  | 257,628 |  |  | 3,692,818 |
Net loss |  | $ | (2,449,377 | ) |  | $ | (12,215,766 | )
Diagnostic Medical Group APC accounts for its 40% investment in DMG, under the equity method of accounting as APC-LSMA, a designated shareholder professional corporation, has the ability to exercise significant influence, but not control over DMG’s operations. APC recorded income from this investment of $0.3 million and $1.0 million in 2019 and 2018, respectively, in the accompanying consolidated statements of income. During the years ended December 31, 2019 and 2018, APC received dividends of $0.2 million and $0.6 million, respectively, from DMG. The investment balance was $2.3 million December 31, 2019 and 2018, respectively. Pacific Ambulatory Surgery Center, LLC Pacific Ambulatory Surgery Center, LLC (“PASC”), a California limited liability company, is a multi-specialty outpatient surgery center that is certified to participate in the Medicare program and is accredited by the Accreditation Association for Ambulatory Health Care. PASC has entered into agreements with organizations such as healthcare service plans, independent practice associations, medical groups and other purchasers of healthcare services for the arrangement of the provision of outpatient surgery center services to subscribers or enrollees of such health plans. APC accounts for its 40% investment in PASC under the equity method of accounting as APC has the ability to exercise significant influence, but not control over PASC’s operations. During the year ended December 31, 2019, the Company recognized an impairment loss of $0.3 million related to its investment in PASC as the Company does not believe it will recover its investment balance. Such impairment loss is included in loss from equity method investment in the accompanying consolidated statement of income. During the year ended December 31, 2018, APC recorded a loss from this investment of $0.3 million, in the accompanying consolidated statements of income and has an investment balance of $0.3 million at December 31, 2018. Accountable Health Care, IPA Accountable Health Care is a California professional medical corporation that has served the local community in the greater Los Angeles County area through a network of physicians and health care providers for more than 20 years. Accountable currently has a network of over 400 primary and 700 specialty care physicians, and five community and regional hospital medical centers that provide quality health care services to more than 84,000 members of three federally qualified health plans and multiple product lines, including Medi-Cal, Commercial, Medicare and Healthy Families. On September 21, 2018, APC and NMM each exercised their option to convert their respective $5.0 million loans into shares of Accountable capital stock (see Note 7). As a result, APC’s $5.0 million loan was converted into a 25% equity interest with the remaining $5.0 million loan held by NMM to be converted into an equity interest that will be determined based on a third party valuation of Accountable’s current enterprise value. On August 30, 2019, APC and APC-LSMA entered into separate agreements with Dr. Jayatilaka to acquire the remaining outstanding shares of capital stock (comprising 75%) of Accountable Health Care in exchange for $7.3 million in cash. In addition to the payment of $7.3 million, APC assumed all liabilities and assets of Accountable Health Care (See Note 3 and Note 7). The Company recognized a gain of approximately $1.8 million as a result of the transaction, which represented the difference between the fair value of the 25% ownership held and the Company's basis at the time of acquisition. Such gain is included in loss from equity method investment in the accompanying consolidated statements of income for the year ended December 31, 2019. Effective September 1, 2019, Accountable Health Care's financial result is included in the consolidated balance sheets and the consolidated statements of income for the year ended December 31, 2019. 531 W. College LLC In June 2018, College Street Investment LP, a California limited partnership (“CSI”), a related party, APC and NMM, entered into an operating agreement to govern the limited liability company, 531 W. College, LLC and the conduct of its business, and to specify their relative rights and obligations. CSI, APC and NMM, each owns 50%, 25% and 25%, respectively, of member units based on initial capital contributions of $16.7 million, $8.3 million, and $8.3 million, respectively. On June 29, 2018, 531 W. College, LLC closed its purchase of a non-operational hospital located in Los Angeles from Societe Francaise De Bienfaisance Mutuelle De Los Angeles, a California nonprofit corporation, for a total purchase price of $33.3 million. In June 2018, APC, NMM and AMHC Healthcare, Inc. on behalf of CSI, wired $8.3 million, $8.3 million and $16.7 million, respectively into an escrow account for the benefit of 531 W. College, LLC to purchase the hospital pursuant to the Purchase Agreement. The transaction closed on June 28, 2018. On April 23, 2019, NMM and APC entered into an agreement whereby NMM assigned and APC assumed NMM's 25% membership interest in 531 W. College, LLC for approximately $8.3 million. Subsequently, APC has a 50% ownership in 531 W. College LLC with a total investment balance of approximately $16.1 million. APC accounts for its investment in 531 W. College, LLC under the equity method of accounting as APC has the ability to exercise significant influence, but not control over the operations of this joint venture. APC’s investment is presented as an investment of equity method in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. During the years ended December 31, 2019 and 2018, NMM and APC recorded losses from its investment in 531 W. College LLC of $0.2 million and $0.4 million, respectively, in the accompanying consolidated statements of income. During the year ended December 31, 2019, APC contributed $0.7 million to 531 W. College, LLC as part of its 50% interest. The accompanying consolidated balance sheet includes the related investment balance of $16.7 million and $16.3 million, respectively, related to APC's investment at December 31, 2019 and APC's and NMM's investment at December 31, 2018. 531 W. College LLC’s unaudited balance sheet at and unaudited statement of operations for the years ended December 31, 2019 and 2018 are as follows: Balance Sheet
|  | December 31, 2019 (unaudited) |  | December 31, 2018 (unaudited)
Assets |  |  |  |
Cash |  | $ | 139,436 |  |  | $ | 158,088 |
Other current assets |  | 16,500 |  |  | 16,137 |
Other assets |  | 70,000 |  |  | 70,000 |
Property and equipment, net |  | 33,581,438 |  |  | 33,394,792 |
Total assets |  | $ | 33,807,374 |  |  | $ | 33,639,017 |
Liabilities and Stockholders’ Equity |  |  |  |
Current liabilities |  | $ | 1,061,577 |  |  | $ | 1,007,413 |
Stockholders’ equity |  | 32,745,797 |  |  | 32,631,604 |
Total liabilities and stockholders’ equity |  | $ | 33,807,374 |  |  | $ | 33,639,017 |
Statement of Operations
|  | Year Ended December 31, 2019 (unaudited) |  | Year Ended December 31, 2018 (unaudited)
Revenues |  | $ | — |  |  | $ | — |
Expenses |  | 1,010,423 |  |  | 875,771 |
Loss from operations |  | (1,010,423 | ) |  | (875,771 | )
Other income |  | 474,617 |  |  | 162,451 |
Net loss |  | $ | (535,806 | ) |  | $ | (713,320 | )
MWN LLC On December 18, 2018, NMM along with 6 Founders LLC, a California limited liability company doing business as Pacific6 Enterprises (“Pacific6”), and Health Source MSO Inc., a California corporation (“HSMSO”) entered into an operating agreement to govern MWN Community Hospital, LLC and the conduct of its business and to specify their relative rights and obligations. NMM, Pacific6, and HSMSO each owns 33.3% of membership shares based on each member’s initial capital contributions of $3,000 and working capital contributions of $30,000. NMM invested an additional $0.3 million, as part of its 33.3% interest, for working capital purpose. As of December 31, 2019 and 2018, NMM’s investment balance of $0.2 million and $33,000 are included in investments in other entities - equity method in the accompanying consolidated balance sheet. Investment in privately held entities MediPortal, LLC In May 2018, APC purchased 270,000 membership interests of MediPortal LLC, a New York limited liability company, for $0.4 million or $1.50 per membership interest, which represented approximately 2.8% ownership. APC also received a 5-year warrant to purchase 270,000 membership interests. A 5-year option to purchase an additional 380,000 membership interests and a 5-year warrant to purchase 480,000 membership interests are contingent upon the portal completion date, which has not been completed as of December 31, 2019. As APC does not have the ability to exercise significant influence, and lacks control, over the investee, this investment is accounted for using a measurement alternative which allows the investment to be measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. During the year ended December 31, 2019 there were no observable price changes to our investment. AchievaMed On July 1, 2019, NMM and AchievaMed, Inc. a California corporation ("AchievaMed") entered into an agreement in which NMM would purchase up to 50% of the aggregate shares of capital stock of AchievaMed over a period of time not to exceed five years. As a result of this transaction, NMM invested $0.5 million for a 10% interest. The related investment balance of $0.5 million is included in "Investment in a privately held entities" in the accompanying consolidated balance sheet as of December 31, 2019. As NMM does not have the ability to exercise significant influence, and lacks control, over the investee, this investment is accounted for using a measurement alternative which allows the investment to be measured at cost, adjusted for observable price changes and impairments, with changes recognized in net income. During the year ended December 31, 2019 there were no observable price changes to our investment.

X
- References No definition available. + Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration